MS. PERINO: Good afternoon. I have a couple of announcements -- well,
three announcements. Shortly you'll hear from the President about the
deficit numbers that have come in. It is significantly narrowed from last
year. And today's results are further proof that tax relief, combined with
spending restraint, leads to economic growth. You'll hear from the
President about that, as well as his commitment to making sure that we keep
good economic policies going, and don't allow Democrats in Congress to run
wild with the nation's checkbook as we go through the appropriations bills
fights this fall.

On Monday, October 22nd, the President will present the Medal of Honor
posthumously to Lieutenant Michael P. Murphy, U.S. Navy, for conspicuous
gallantry, is the term. As you may know, the Medal of Honor is the highest
award that the President can bestow. It is given for gallantry in the face
of an enemy attack that's above and beyond the call of duty. It is a
cherished American tradition that began in the White House with the
signature of President Abraham Lincoln.

Lieutenant Murphy distinguished himself by extraordinary heroism on June
27th and 28th, 2005, while serving as the commander of a special
recognizant element and Naval Special Warfare Task Unit in Afghanistan.
This will be the ninth Medal of Honor presented by President Bush.

Also this morning, the President spoke with Iraqi Prime Minister Maliki by
secure video from the White House Situation Room, this morning at 7:15 a.m.
for about 40 minutes. The two leaders discussed working with legislative
bodies and getting laws passed, and that the process can be challenging and
at times frustrating. However, they also agreed that recent improvements
in security and the economy in Iraq were a tribute to the Iraqi government
and the Iraqi people, and should provide for progress in the areas of
political reconciliation, especially from the local government levels up.
And the leaders welcomed the neighbors conference that's coming up the
beginning of November in Istanbul. And finally, they also talked about the
importance of building the enduring partnership between Iraq and the United
States as envisioned in the Iraqi leaders agreement that was passed at the
end of August, 2007.

Q Any discussion on Blackwater?

MS. PERINO: There was not.

Q Okay. Are you ready for questions?

MS. PERINO: I am.

Q Just talking about the deficit numbers, Senator Kent Conrad says that
the Bush administration will go down in history as the most fiscally
irresponsible President ever -- the President will. And he's talking about
the national debt that went from $3 trillion to $9 trillion. How do you
respond to that?

MS. PERINO: Well, I think that the proof is in the pudding. And if you
look at the numbers, the President has a very strong record on economic
growth. We -- when the President first came into office, he inherited a
recession. Then we were -- our nation was horribly attacked on September
11th, and there was an economic crisis, as well as a human one. And the
President put in place good economic policies to make sure that we could,
first and foremost, take care of the American people in terms of their
national security.

So there was extra spending on that, and we don't apologize for it. But
the President has also made sure that we have had tremendous economic
growth, based on the tax cuts and other policies he has in place. And in
addition to that, we are on a path right now to bring down the -- to
eliminate the deficit and actually get to surplus by 2012. And by any
measure, I believe, people would say that those are good economic numbers.

The debt is an issue that we continue -- have to continue to address. And
one of the best ways to do that is to make sure that this year in the
appropriations fight the Democrats aren't allowed to spend an extra $205
billion of the American taxpayers' money that they want to spend over the
next five years in these appropriations bills.

Q Well, you point the finger at the Democrats, but many Republicans are
also -- conservative Republicans -- are also unhappy with the level of
spending that President Bush has allowed, that he hasn't exercised his veto
to keep spending lower.

MS. PERINO: Earlier, when the Republicans were in Congress, the President
did issue many veto threats that helped result in keeping numbers down.
The President has had a good record on that. We're going to make sure that
we hold them to it this year, especially because I think all Americans can
agree on the goal that if the President has set us on a path to get to a
surplus by 2012, that that is something we should all look -- work together
on at the legislative branch and the executive branch to make sure we can
do that. The President has shown that we can do that without raising taxes
while being fiscally prudent, and making sure that we take care of our
national security needs, which is our number one priority.

Jim.

Q Dana, in Turkey, the Prime Minister is announcing that he'll ask
Parliament to authorize a cross-border incursion into Iraq to take on the
Kurdish rebels. To what degree is this a reaction to yesterday's vote in
the House?

MS. PERINO: Well, I think -- I don't know. You'll have to ask him. But I
think --

Q How do you see it?

MS. PERINO: I don't know how I would explain his -- I'm going to let him
speak for himself. But this question about incursions into Iraq or
invasions into Iraq from Turkey has been asked since the beginning of the
week, and so with the vote just being held yesterday, I don't know if there
is a causation there. What they are -- what the Turks are concerned about,
and that we share their concern, is that there are PKK terrorists that are
wreaking havoc up in southern Turkey as well as there in northern Iraq.
It's a problem for the Iraqis, it's a problem for us, it's a problem for
Turkey, and so we all need to work together to make sure we can eradicate
the terrorists that are there. I think that we are making some -- having
some improvement on that, in regards to the diplomatic efforts that we're
working on, as well as militarily helping to identify any of those
terrorists.

Q It seems like the timing is a little curious in that to some degree,
at least there's a pretext here, if you didn't vote the way we asked you
to, that, you know, we're going -- these are sort of some of the
consequences that can happen. It seems like a curious relationship for
allies to have.

MS. PERINO: Well, let me point you back to what Secretary Rice and
Secretary Gates said yesterday, which is -- they didn't mention the issue
about Turkey coming into Iraq, but what they did talk about is that one of
the reasons we opposed the resolution in the House yesterday is that the
President has expressed, on behalf of the American people, our horror at
the tragedy of 1915, but at the same time we have national security
concerns and many of our troops and supplies go through Turkey. They're a
very important ally in the war on terror, and we are going to continue to
try to work with them and we hope that the House does not put forward a
full vote.

Q One last follow. The President said yesterday that it wasn't the
correct response to label what happened genocide. What is the correct
response?

MS. PERINO: Well, he -- I would -- point you back to -- for the last seven
years, he has issued a presidential message, and one of the things that he
has said is that it was a horrible tragedy, very sad -- let me get you one
precise language. He says that we cherish freedom and value the sanctity
of life, and we look back on these horrific events in sorrow and disbelief,
and many of those survived, they were the ones who were forced from their
ancestral homes. And I think that anyone who saw the picture of the
Armenians yesterday who were there for the vote, you can feel for them and
you understand how their hearts are heavy and they want some recognition
for what they went through. And I believe that what the President was
saying that the appropriate way to do that, in his mind, is for the
President of the United States to express that concern on behalf of the
American people. The previous administration, the Clinton administration,
also asked the House not to pass such a resolution, so Presidents have been
consistent on this in the past.

Q Speaking of former Presidents, Mr. Carter has been talking about Vice
President Cheney again, he did the interview with the BBC. Does President
Bush think Jimmy Carter's comments are in any way harmful to the way others
around the world see the U.S.? Because, again, that was with the British
Broadcasting Company.

MS. PERINO: I haven't talked to the President about the recent comments by
Vice President [sic] Carter. Obviously he's an American citizen and free
to express his views. Personal attacks on the Vice President are just
something we're not going to comment on, and we'll -- if the former
President chooses to engage in that, we'll let him do it on his own.

Q And with the conversation with Prime Minister Maliki, was there any
discussion of the former Saddam general who had cooperated with the CIA,
who faces potential execution?

MS. PERINO: There was not. This conversation was very much focused on the
political reconciliation needs, as well as the enduring partnership
agreement that they want to pass.

Q Does the President have any concern that if someone who had in the
past cooperated with the CIA, if he were to be executed, that that might
hinder cooperation when they're trying to bring Iraqis into the --

MS. PERINO: I'm just not -- I don't know enough about it. I'm not
prepared to answer.

Q Does the President remain frustrated with Prime Minister Maliki about
the progress?

MS. PERINO: Well, I think he's -- I wouldn't say that he's frustrated with
Prime Minister Maliki. He believes that he's a good leader, a good man
with a really huge task in front of him, and that he's trying as hard as he
can to pull together the different factions, and that he's working through
-- with the other leaders, including President Talabani, who is helping
push everyone towards reconciliation. I think the President is frustrated
that overall the progress has been slow, but it wasn't personal.

Q Did he encourage him? Does he think there's anything he can do that
he hasn't done?

MS. PERINO: Well, one of the things that they talked about was the
frustration that you can have when you're in the executive branch and
trying to push the legislative branch into acting on something that you
want to see done. And the President gave a couple of examples of how we
here in the United States, when the President wants Congress to push on
something, that you use a few different tools to do that, and use your
influence and your leverage in order to do it.

So he tried to help him and try to understand that there are ways that you
can use your influence and your leverage in order to help push these things
through.

Matt.

Q Dana, China has complained bitterly about the plans for the Dalai Lama
to receive the Congressional Gold Medal next week and, by extension, the
President's plan to attend that ceremony. Can you respond to that? And is
there any indication the President will meet face to face with the Dalai
Lama?

MS. PERINO: Well, I wouldn't rule that out, but I have nothing to announce
for you in terms of a meeting with the Dalai Lama. If you'll recall, when
we were in Australia at the APEC meeting, the President told President Hu
that he would be attending the Congressional Gold Medal ceremony, and the
President and Mrs. Bush look forward to attending it.

The President will make brief remarks, and he will reiterate our view that
the Dalai Lama is a great spiritual leader. He leads a movement that is
aimed not only for independence from China but for the rights of the
Tibetan people.* And the President wants -- is going to -- let me see, I
guess I can announce -- I just had it here -- I knew that there was a
meeting in the works but I didn't know it had been confirmed. He will meet
with the President on October 16th, the day before.

Q At the White House?

MS. PERINO: At the White House.

Q Can I follow up on that?

MS. PERINO: Sure.

Q The President is concerned about relations with Turkey, and has
opposed a resolution which is non-binding in one House of Congress, right,
the genocide -- why is he not afraid of relations with China being damaged
by actually meeting with the Dalai Lama in public for the first time ever
on Wednesday?

MS. PERINO: Well, the President has met with the Dalai Lama many times;
we've released photographs of that so that we'd have a -- there is a public
record of the President meeting with the Dalai Lama.

He -- the President had a good conversation with President Hu when we were
in Australia and told him that we would be welcoming the Dalai Lama to the
United States, that the President would be going to the Capitol, as he does
every year, for the Congressional Gold Medal ceremony.

Q So you're saying it's no big deal that the President will actually be
at a public event for the first time with the Dalai Lama?

MS. PERINO: I think that the President -- first and foremost, he told
President Hu that, back the first week of September of this year. This is
not -- this should not come as news to the Chinese that the President is
going to be attending. And this is a spiritual leader who is fighting for
freedom and democracy, which the President is supporting as well.

And what you're talking about yesterday is the President referring to
something that had happened in 1915 with the Ottoman Empire, and the House
of Representatives having many tasks in front of it, including passing
appropriations bills, even appointing in the House side conferees to talk
about how we're going to spend the American taxpayers' money. They could
work on closing the -- permanently closing the intelligence gap by passing
the FISA legislation. There's a lot of things that the House could be
doing and the Senate could be doing, rather than passing resolutions,
talking about historical actions in 1915.

So he will go next week --

Q Is it not a big -- so you're saying that the Wednesday public ceremony
is not a big deal?

MS. PERINO: Well, we would hope that the Chinese leader would get to know
the Dalai Lama as the President sees him, as a spiritual leader and someone
who wants peace. And that's what the President will -- that's what the
President urges in meetings. He understands that the Chinese have concerns
about this. They were expressed to the President as well in Australia.
He's well aware that there are different feelings about this. He believes
that as a leader and as the President of the United States, and someone who
always attends a Congressional Gold Medal ceremony, that he is going to go
and he will proudly be there to witness the event.

Q Dana, back on the economy, despite the good numbers, the latest Pew
poll shows that it's the fastest-rising concern, second only to Iraq -- the
state of the economy, and those numbers are higher among those who don't
have a college education and minorities. Is there a disconnect here? I
mean, why are there so many American people who have expressed concern
about this?

MS. PERINO: I think there's a lot -- I think a lot goes in -- I haven't
seen the poll, but I think a lot of different information can be gleaned
out of something like that. First of all, you do have people who, if they
don't have a college education in our world, which is very competitive, and
with jobs increasing overseas in places like China and India, we have to
compete at a different level. And the President has encouraged new types
of job-training programs, trade adjustments so that people who lose jobs
that have gone overseas can actually get new training for jobs that they
can get here. The President's policies have helped create 9 million new
jobs since August of, I think, 2003.

And so while there are -- there is good news on the economy, in terms of
the job numbers, there is also concern about how people are going to pay
for their child's education, how they're going to plan for their retirement
if they are at risk of losing their home because of a mortgage that they
signed up for that maybe they -- didn't turn out to be what they thought it
was going to be.

So there are a lot of different ways to look at the economy. The President
will speak about it shortly, and then certainly Secretary Paulson and
Secretary Jackson on the housing side have been doing a lot of different
policy mechanisms in order to get people to feel more confident in their
economy.

But by any measure, if you look at our economy compared to those around the
world for industrialized nations, we're doing very well. And the most
important thing that the President can do is prevent Congress from
implementing bad economic policies such as tax cuts -- I'm sorry, rising --
raising taxes. If they were going to do tax cuts he would take that deal.
But I think what the President can do is make sure that they don't increase
taxes on people.

I mean, one of the ways they want to pay for their S-CHIP expansion is by
an increase in taxes on a product that the government is actively
encouraging people to stop using, tobacco.

Q Is the hope that the President will talk more and more about this to
convince the American people that things are getting better?

MS. PERINO: Well, yes. I do think that you'll hear the President talking
about the economy a lot. Obviously we have the congressional schedule in
front of us where we need to have Congress moving forward to pass some of
these budget bills so that we can have concrete answers as to how the
federal government is going to spend the taxpayers' money. That's what the
President -- you'll hear him talking about that. And he'll be talking
about trade tomorrow, free trade agreements that we're working on with
Latin America, as well as South Korea. You'll hear him talk about the
economy when he goes to small businesses. You'll be hearing a lot about
it. But I would encourage you to look back, as well, and the President has
been talking about this for a while.

Q Back to the Turks. You know there was shelling near the border. The
Turks attacked some positions yesterday. If we're telling them, please
hold off, they're not listening.

MS. PERINO: Look, we are in constant contact with them, both from the
diplomatic side and the political side of our -- with our team there,
Petraeus and Crocker. And we're working with them and the Iraqis are
working with them, because the Iraqis don't want the PKK terrorists there
anymore than the Turks do.

Q Did that come up in the call this morning with Maliki?

MS. PERINO: No. Again, it was focused on the political reconciliation
issues and the enduring partnership agreement.

Yes, Wendell.

Q On trade, there was a reduction in the trade deficit this month that I
suppose you're pleased about. I suppose you are.

MS. PERINO: Sure.

Q However -- (laughter.)

MS. PERINO: I'm waiting for the catch. (Laughter.)

Q Well -- the trade deficit has reached record levels the past five
years, all under the President's watch. He's been talking free trade
agreements. If you're from Michigan and Ohio, you feel it because the
manufacturing jobs are fast going from those states. So how is the
President helping those people?

MS. PERINO: Well, the Department of Labor has been implementing some -- do
you have a further question?

Q And why is he not more concerned about the rising record trade
deficit?

MS. PERINO: Well, the President -- the President is very interested in
trade. And one of the things he's concerned about is that as a nation we
don't turn isolationist or protectionist in any of our policies, because he
thinks that that leads to bad times for the country, including leading up
to the depression as one of the factors that led our country into that
economic depression. The President has had policies in place from the
beginning that Congress worked to fund, that provide job training for
individuals who have lost a job because they have seen their manufacturing
job goes overseas.

The President believes America should feel very confident in our products,
because people want to buy them. That's one of the reasons that they want
these free trade agreements. They want access to our markets, but they
also want to have access to our products, and you'll hear the President
talk about some of the benefits we've seen with, for example, the Chilean
Free Trade Agreement that we had, and he'll talk about that tomorrow.

He's also -- through the Department of Labor providing trade adjustment
assistance so that job training and education and, including Pell Grants --
I mean, just recently the President signed a bill that would allow
low-income people to have more money to be able to go to college or maybe a
junior college in order to get some more skills and some education so that
they can compete for the jobs that they want. The President is -- the
President understands that not only is there concern about what will happen
if I lose my job to someone overseas; what will happen if I don't have the
education I need in order to get the job I want; what about my children,
are they going to be able to compete?

The President also, under No Child Left Behind, one of the things that he
wants to do is close the achievement gap between minority and white
students so that we can make sure that everyone is getting the education
that they deserve. Those are the types of things that can set the country
up to be competitive from now well into the future, and the President --
you'll hear him talk about it tomorrow as well.

Q Given that, does the President believe these trade deficits are
sustainable or does he believe the situation will turn around at some
point?

MS. PERINO: I think that the President believes that we'll be able to
continuing to put -- push more products out of America and we'll start to
close those deficits.

Q You want to predict when?

MS. PERINO: I'm not going to do that, not from here.

Peter.

Q Totally different subject, Dana. I'm wondering about the
administration's level of awareness of and concern about the recent series
of noose incidents, the latest one being at Columbia, in New York.

MS. PERINO: Well, you know that the President talked about this a little
bit at the press conference that he had about three weeks ago after the
Jena Six situation and that trial --

Q There have been a lot since then, though.

MS. PERINO: The President had got a -- has been kept up to date. I don't
know about this latest one; frankly, it's the first I've heard of that one.
But, obviously we're seeing the regular reports about it, and the
President spoke to -- got a briefing from our team here, who had been
contact with Department of Justice, who says that they are tracking and
monitoring these situations very closely. And in addition to that, to the
extent that you can, the interview that the President did with Juan
Williams, he talked about race relations in general, in terms of how he
does not see that this is what America really stands for; that these are --
hopefully -- isolated incidents, and that he understands how hurtful they
can be to people when they occur.

Q The Southern Poverty Law Center, a respected group, reports a 30
percent increase in the number of hate groups -- hate groups, not incidents
-- in the past five years. Why do you think that is?

MS. PERINO: You know, I don't know. And I'd have to refer you to those
who have studied that situation. What the President would like to see is
the good of America coming through. And to the extent that people feel
that they don't want to be a part of this great American society that we've
created over the years after some hardship in our own history, that he's --
he would be very concerned about that. And he thinks that the spirit of
America does come through in the vast, vast majority of places around the
world -- I mean, around the country.

I'm going to John first, Tara.

Q Thanks, Dana. You had some high praise for the D.C. school voucher
system earlier this week, and I just wondered if the White House had a
response to the GAO report about the -- some schools charging --
overcharging tuition and undercharging --

MS. PERINO: Well, I did praise that program because there are so many
children who are benefiting from being able to have their parents look at
the school that they're in and decide that it's not the best school for
them, they're not getting the education that they need, and to be able to
make a choice and put them in a better school. And that program gets good
ratings from the parents who are in that program.

The Department of Education's preliminary review of that draft GAO report
questions the findings; believes it's an incomplete picture, and they'll be
providing comments to the GAO before it's final. So I'd refer you over to
the Department of Education for more on that.

Q So they're checking into the results now -- believe that it's --

MS. PERINO: Their preliminary review questions the findings and doesn't
believe that it provides a complete picture.

Sara.

Q Thank you, Dana. Where does the President go from here on immigration
report -- reform? Would he like to put pressure on Congress to pass an
immigration bill?

MS. PERINO: Well, the President did try to get Congress to pass a
comprehensive immigration reform bill. We would call on them to do it, and
I think some of the -- the things that you're seeing around the country,
with different localities coming up with their own laws, you're creating a
patchwork situation of laws across the country that are then being usurped
by federal courts. Yesterday, the 9th Circuit threw out one of the ways
that we're trying to enforce border -- enforce making sure that employers
are hiring legal Americans in order to work for them.

And we can work as hard as we possibly can on border enforcement issues,
but if they get turned over by the courts or turned over by localities,
we're going to -- it's going to result in a situation that is absolutely
unsustainable. And so the President would like for Congress to get back to
the table and work on that, but I don't think he anticipates that's going
to happen within the next year.

Q Thank you.

MS. PERINO: He said thank you. I'll get you next time.

END 1:00 P.M. EDT

*He (the Dalai Lama) leads a movement that is aimed NOT for independence from China, but for the rights of the Tibetan people.